Morgan Prospect

One well is completed and producing both oil and gas

Formation is Sprayberry-Dean-Wolfcamp-Strawn formations

80 acre prospect

Located in Martin County, Texas

Prospect Background

In November 2012, the Company, through its partnership with Aurora Energy Partners acquired a 3% working interest and a 2.25% net revenue interest in 80 gross acres known as the Morgan Property. This property is located in the Permian Basin Wolfberry Play. The first well, Morgan #1 was spud in December 2012 and reached total depth (10,616 feet) in January 2013. The Morgan #1 was fracture stimulated and completed in March 2013. The well is currently producing both oil and gas.

The acreage held currently provides 40 acre spacing and thus an opportunity to drill a second vertical well on the prospect acreage.